Bitcoin’s Latest Plunge Highlights the Dangers of a Crypto Salary

When was the last time your entire paycheck shrank by more than 20%?

If you are being paid in Bitcoin, the answer was Saturday, when the token fell as much as 21% in a matter of hours. While it has recovered ground, Bitcoin is still down more than 25% from the record high it reached about a month ago. That rapid plunge highlights just one peril of a nascent trend that’s being hyped up by politicians and celebrities — being paid in digital currencies.

With major U.S. cities competing for investments in the fast-growing blockchain industry, their leaders are increasingly trying to promote policies that help more people get at least a part of their salary in crypto.

Miami Mayor Francis Suarez said last month he would take his next paycheck “100% in Bitcoin” and has announced that he is working on a plan to pay the city’s more than 4,000 employees in cryptocurrency. Not only that, residents would be able to pay fees and taxes in Bitcoin, he told Bloomberg Television in an interview earlier this month.

Not to be outdone, New York City Mayor-elect Eric Adams says he’s exploring ways in which all the millions of people working in the largest U.S. city could be paid directly in Bitcoin and other cryptocurrencies. He himself said last month that he would take his first three paychecks in Bitcoin. Professional athletes Russell Okung, Odell Beckham Jr and Aaron Rodgers have all said they will be paid at least in part in crypto. The number of Bitcoin ATMs in the U.S. has soared 577% to about 28,500 over the past two years, according to Coin ATM Radar.